Explanation
A CEX is usually cheaper and faster than trading on-chain, but you rely on the company's solvency and security. In Europe, MiCA imposes hard requirements on that.
How a centralised exchange works
You deposit euros, the exchange holds your coins and internally tracks what is yours. Most trades therefore never touch the blockchain but happen inside the exchange's database — which makes them fast and cheap. Only when you withdraw to your own wallet does a real transaction occur.
What to check when choosing
A European MiCA licence, clear costs including the spread, segregated client assets, a decent annual statement for tax purposes and functioning withdrawals. Test that last point before depositing large sums: an exchange that takes money smoothly but pays out slowly is a warning in itself.
Key takeaways
- Check the licence and legal entity.
- Test withdrawals with a small amount.
- Download the annual statement for your tax return.
Frequently asked questions
+Can I leave my coins on the exchange?
For a trading balance that is workable. For long-term holdings the classic FTX lesson still applies: not your keys, not your coins.